Fleets who want to optimize routing share a common goal: to deliver goods and freight on time and in the most efficient manner. But how individual fleets accomplish that goal can vary a lot by the fleet’s business model. So how do you find the right approach? Comparing the various techniques can help narrow down the options.
Standard vs. Dynamic Routing
Does your business make the same stops every day or every week? Or is routing a continually shifting puzzle? The answer can slot your fleet into one of two main strategies organizations use to optimize their routes: standard routing and dynamic routing. Standard routing is a planned approach where a vehicle visits the same customers in the same order every day. Dynamic routing creates a new set of routes and stop sequences each day to drive cost savings and create efficient geographical routes.
“Standard or fixed routes continue to be leveraged by businesses where customer satisfaction is improved through driver-to-customer relationships and delivery consistency. These preplanned routes ensure that customers consistently see the same driver and that their deliveries arrive reliably at scheduled appointment times,” said Tyler Forcum, senior product manager, Omnitracs. “Dynamic routes are typically preferred by businesses looking to drive down transportation costs and/or in sectors where responsiveness to changing customer needs is best served by performing route optimization on a daily or near-real-time basis.”
But what happens if your business has both routine deliveries and ad hoc needs? Forcum suggests cell routing, which enables fleets to group a series of service locations. “This ‘cell’ of customers allows the route planner to leverage a hybrid of standard routing and dynamic routing, which ensures drivers consistently serve certain customers while also taking advantage of dynamic routing for other stops to minimize delivery costs,” he explained.
Planned vs. Actual
Another route optimization technique is to compare planned routes to what actually plays out in the field. As we all know, even the best-laid plans don’t always play out as intended. That’s why some fleets use telematics to gather information like the actual route the driver has taken, the speed traveled, the time to get to the destination, and the times of pick up or delivery, then feed it back into the route planning system to identify discrepancies. “Discrepancies might be the driver hasn’t taken the route as planned or there were circumstances the plan didn’t foresee,” explained Bill Westerman, VP of product management – government, CalAmp. “Comparing the planned and actual routes lets you see the gaps, replan, and update based on the anomalies.”
For example, a planned route might use the posted speed limits as a starting point to calculate travel time — but if the plan doesn’t take rush hour traffic into account, the actual speed a driver travels will be slower, and the travel time longer. Once real-time information about the speed traveled during rush hour is fed back into the system, that information can be used to generate a better plan.
“By looking at vehicle routes historically, trucking fleets can take a strategic approach to plan future routes to ensure efficiency,” said Jenny Shiner, communications manager, GPS Insight. “Likewise, by looking at the trips of multiple vehicles on any given day, overlapping routes can be identified and eliminated. Doing this improves fleet efficiency and reduces fuel costs.”
Routing systems can also provide real-time monitors. These systems can report when drivers check-in and start their routes. “If they don’t start on time, it’s hard to keep up on the route. Or, if there is a no-show, the organization can find ways to adjust and locate a substitute driver,” Westerman said. “Having real-time information can help organizations make a plan B and recover faster.”
Shiner says that layering both real-time monitoring and comparing actual and planned routes yields the greatest value. “Focusing on the day-to-day routes in real time as well as using data for strategic planning of future routing is where many fleets experience the most impact with a routing solution,” she said. “It always depends on the business, but this two-pronged approach usually delivers the best results.”
Short Trips vs. Long Trips
Routing techniques can also vary based on the length of the trip. “In my experience, most local operators (100-150 air miles) typically have static routes and dispatch to the same locations on a regular basis,” said Oswaldo (Ozzie) Flores, product manager, compliance and safety solutions, Teletrac Navman. “These carriers typically use GPS tracking, and dispatchers and drivers are in close communication to choose the most efficient routes based on the time of day, traffic information, and location. GPS tracking especially comes in handy when there are ‘hot shot’ loads that require drivers and dispatchers to deviate from their normal route and dispatch to new locations.”
On the other hand, Flores said carriers with non-local operations (150-plus air miles) typically use more advanced forms of technology to optimize routing, dispatch drivers, and deliver freight. These can include techniques like live dispatch, which sends messages directly to drivers’ in-cab devices, or integrations with TMS solutions, which help build or optimize routes based on location, time, delivery, and traffic that are sent directly to drivers in-cab.
“Fleets may also leverage solutions with sophisticated algorithms integrated into their in-cab devices or TMS which account for traffic, weight, weather, road conditions, delivery window times, driver’s HOS, and vehicle size to optimize deliveries in real-time with notifications to the driver on which delivery location they should drive to next,” he said.
A Technique for Every Business Model
Of course, the type of business a company conducts ultimately determines which technique yields the greatest return. For instance, Steve Wells, co-founder and CMO, ClearPathGPS, says service companies are often more concerned with driving the most efficient path to the next customer, whereas delivery companies are looking to find out in which order they should be visiting their stops. “Service companies might prefer using a calendar to schedule out their jobs one by one as they come in,” he explained. “However, package delivery companies will probably want to upload a spreadsheet or use an open API to integrate into their order management system.”
Flores said routing challenges specific to the service industry include mechanical breakdowns, missing service windows, or canceled service calls. “By using technology like GPS fleet tracking, fleets can be more transparent about delays or challenges with customers,” he said. For freight delivery operations, Flores said typical routing challenges include tight delivery windows, delayed freight arrival, tracking and managing HOS, mechanical breakdowns, unforeseen traffic, demurrage time, and weather conditions.
Sherry Calkins, AVP strategic partners, Geotab, agrees that fleets in different industries will need different solutions based on their business needs. For instance, she notes that last-mile delivery companies delivering packages to consumers will have very different needs than a service fleet, which might require emergency route planning and pairing the right technician with the right truck, equipment, and tools to perform the work. “Having one integrated platform with an ecosystem of solutions and value-added partners is critical to meet all the demands of clients and ensure you are flexible and scalable enough with the software and platform you are using,” she said.
Shiner said ultimately it comes down to each fleet’s specific goal. “We often see delivery industries looking to improve route efficiency to keep their people on track throughout the day, completing all deliveries on schedule,” she said. “Fleets that offer in-home services want to be able to provide accurate ETAs and let their customers know proactively if they are delayed in an effort to provide the best customer experience. Construction fleets are using telematics to ensure drivers take the best route to every job site, with the shortest and quickest distance between the locations.”
How to Choose the Right Technique for Your Business
Choosing the proper routing technique to fit your fleet’s unique needs can depend on a number of criteria. Flores of Teletrac Navman said these can include:
- The size of your operation (the number of assets, drivers, dispatchers, administrative staff, equipment, etc.)
- The size of the area you serve (local vs. over-the-road).
- Scheduling (whether deliveries are consistent or change frequently).
- Delivery dispatch (spot loads vs. hot shot loads, static routing, dispatch, and/or live dispatch).
- Type of company (e.g., service vs. freight delivery).
Based on these factors, one trucking fleet may have straightforward routing needs, while another may require a more dynamic approach. The level of route optimization will vary based on the nature of the business, and Shiner says it’s important for trucking fleets to determine what level they require.
“To get the most out of the investment, ensuring the routing system best matches the trucking fleet’s specific use cases, ranging from how complex to simple the route optimization needs to be, is crucial. The features vary by system level, so having a firm understanding of routing requirements going into the conversation will help both the trucking fleet and software provider figure out quickly if it’s a fit,” she said. “For trucking fleets that need to optimize routes for thousands of vehicles each day, a more advanced routing platform is necessary, which can be integrated with telematics and fleet management platforms. For more simple routing needs, a telematics platform can provide the features needed, such as which vehicle is closest to the job location.”
Forcum also notes that finding the right optimization technique isn’t a “one and done” process. “Picking the right optimization technique is often an iterative process, balancing financial performance, business strategy, and customer needs,” he said.
Choosing the right optimization technique ultimately comes down to what is most important to the operation.
“Route compliance among their drivers, dispatching the right asset with the right skilled technician, quick service to customers, last-mile delivery — these will all change the focus and metrics that are important to their company’s strategy and goals,” Calkins said. “The key is to have the data keep you informed and tell you exactly what you need to focus on to continue to create efficiencies and improve the bottom line.”
Matching the Routing Technique to the Business Goal
While routing optimization can help fleets take the most efficient path, they can also achieve other business goals along the way. Here are a few.
Goal: Reduce Fuel Costs
“A lot of businesses are using routing techniques to help reduce fuel costs. Taking the scenic route to job sites not only wastes time, but it also extends the use of the vehicle and increases the fuel it takes to operate it. Ensuring vehicles take the routes with the shortest distances helps fleets use less fuel overall.” — Jenny Shiner, Communications Manager, GPS Insight
Goal: Right-Size the Fleet
“Let's say you tell the software you have 10 trucks, 100 stops to make, and each stop should take around 15 minutes. When taking traffic and weather conditions into consideration, the system will optimize the routes and my find that you only need seven trucks to complete these 100 deliveries, which means you can take on a lot more business.” — Steve Wells, Co-Founder and CMO, ClearPathGPS
Goal: Meeting Delivery Windows
“Direct-store-delivery fleets face challenges meeting specific service windows for each delivery they have to make throughout a day. To ensure they can do this, their route optimization approach is configured to emphasize meeting service windows to ensure customer satisfaction. To help solve the direct-store-delivery challenges, routers can tune an algorithm to pay more attention to meeting service windows and reducing late arrivals. This will ensure the routes produced will meet the service window challenges.” — Tyler Forcum, Senior Product Manager, Omnitracs
Goal: Get Kids to School on Time
“School districts use routing systems to plan routes to pick up children and get them to school on time. For some districts, classes don’t begin until all of the busses have arrived. So when there are delays, it’s a big deal for teachers and superintendents who are responsible for delivering their curriculum in the time allotted. More accurate route planning using actual route information helps kids show up on time and classes can go on as planned. The system can also help identify when a bus is over- or under-extended and consolidate routes if needed.” — Bill Westerman, VP of Product Management – Government, CalAmp
Goal: Improve Home Delivery
“Home delivery isn’t as simple as it once was and is adding additional pressure of expectations. Customers are wanting more choice in their delivery options, such as affordable shipping options to their home or place of work, secure lockers for convenient pick up and more. It is more important today than ever for delivery companies to provide comprehensive order fulfillment systems with visibility on every step of the process for the customers and delivery companies, and this is where route optimization and order fulfillment software integration is key.” — Sherry Calkins, AVP Strategic Partners, Geotab